Author Archives: Adam Selene

Fred Thompson Withdraws From Race

Fred Thompson, in a statement released by the candidate, withdrew his candidacy for President:

Today I have withdrawn my candidacy for President of the United States. I hope that my country and my party have benefited from our having made this effort. Jeri and I will always be grateful for the encouragement and friendship of so many wonderful people.

Although not unforeseen, it is unfortunate. Thompson was one of the few candidates that was somewhere between neutral and moderately friendly towards more liberty when looking at the current set of issues. While I would not have endorsed him, or any other candidate, for President in this particular group of candidates, I would have liked to see him stay in to push the discussion more his direction and less to the Huckabee and Giuliani side of the house.

A Good Point in the Ron Paul Kerfluffle

This point at Classically Liberal is really quite a good one.

Paul’s final defense is to ask us to believe that he doesn’t pay attention to his own affairs or what is done in his name. He doesn’t read the publications he sends out. In fact, he doesn’t even write his own material. He doesn’t investigate it when problems are brought to his attention. In other words his defense is that he isn’t a bigot but that he is totally inept in such matters. And he wants us to put him the White House — well we had enough of that kind of presidency already.

That’s exactly right. Either Paul knows who wrote these things and won’t speak out against someone who is clearly doing his campaign and libertarianism a massive disservice. Or he doesn’t know.

In one case he is lying and using “I can’t recall” as a defense. That reminds me strongly of Bill and Hillary. I said, then, that I couldn’t support either of them because of that, it would be hypocritical of me to do differently with Paul.

In the other case he is incompetent and inept in managing his staff. That reminds me strongly of George W. and Rumsfeld. I said many times that I couldn’t support that either. Again, hypocrisy.

So, no matter which of the two alternatives it is, Paul is just one more politician. Either a liar or an incompetent.

All you “libertarians” screaming about those of us who don’t support Paul, take that into consideration. He is behaving just like all the other statist politicians that you despise in order to gain the presidency. If it walks like a duck and quacks like a duck ……..

Update: I won’t answer anyone that “debates” using ad hominem techniques. You are trying to discredit the message by attacking the messenger. Anyone who wishes to give me an alternative that is not one of those two, in a rational fashion, I will be happy to discuss it with you.

Update 2: I am not saying, in any way, shape or form that I think Paul is a racist. I am not implying it in any way, shape or form. Anyone who says anything to the contrary in the comments is either making a personal attack or doesn’t read for comprehension. In either case, I won’t respond per update 1.

Update 3: To clarify a bit, I personally think that what we have is a mix of the points that Doug makes here, incompetence in managing people and publications he was responsible for, and refusing to “throw someone under the bus” (which means that Paul is not telling the entire truth about something fairly despicable that he has knowledge of). As Doug and Mark have pointed out, Paul is damaging the message he is attempting to spread. He can either clean house (which we know he won’t do) or he can withdraw. Either of those options would help to prevent damaging his message about individual liberty. The path he is on will not.

Update 4: So, I really have to thank all of you who came by to comment, even the folks who weren’t really intelligible. It would appear that I have had the single best post for number of comments in the history of The Liberty Papers. I think that 174 (and still going strong) comments on a Ron Paul post definitely qualifies for a drink in UC’s little game!

Fascism: It Couldn’t Happen Here, Part I

If all goes well, there will be more than just this post. I’m planning a series discussing Fascism, the origins of the modern American state, and the reality of whether a fascist, authoritarian government, similar to Fascist Italy or Nazi Germany, could happen here. There are a lot of reasons for this series, but the most recent catalyst is this a comment. There are several things in the comment that demonstrate the commenter’s misunderstanding of what fascism is and what happened in this country during the New Deal. For example:

smedley butler and fdr stood up to the facists in the 1930s and 1940s.

Technically our commenter is correct, FDR stood up to Adolf Hitler, the Nazi’s and Germany’s quest to dominate Europe during WWII. However, given the context of the post he is responding to, he is definitely offbase. Here is the specific point that it appears he is responding to:

Even if he [ed: Ron Paul] is unsuccessful at forcing a brokered convention, his candidacy has inoculated a significant part of the U.S. electorate against making the same mistake our grandparents made in the late 1920’s and 1930’s when they embraced the fascism of Hoover and FDR, plunging the U.S. into a depression that lasted well into 1947.

Tarran, the author, is not discussing whether FDR confronted the Nazi’s (and the Japanese militarists and Italian Fascists) directly during WWII. Instead, he is discussing the political underpinnings of the New Deal itself, and FDR’s political beliefs. This is a fairly common mistake. People believe that, because they fought the Fascists in WWII, FDR and Churchill were not Fascists. It does not logically follow that FDR and Churchill were not fascist simply because they fought Hitler and Mussolini. Prior to late 1938 Italy and Germany were opposed to each other and, at least to some degree, Mussolini had sided with France and England as recently as 1936. During the Anschluss of Austria there was a quite real likelihood of Italy intervening militarily against Germany. Yet no one would claim that Mussolini was not a fascist. We cannot determine if FDR and the New Deal were fascist from a military conflict. Instead, we will have to look at the actions and characteristics of the man and the policies.

Another key fallacy is brought out in our commenter’s post:

over the past 75 years the social safety net has saved lives whereas the free market—the playground of both the facists AND the libertarians—has dictated the destruction of anyone and any thing that stands in the way of material profit.

It is an incredibly common belief that Fascists (to include Nazi’s, generally) believe in the free market and capitalism and that they are part of the right wing of politics. A cursory examination of the writings, speeches and actions of Hitler, Mussolini and Tojo reveals this to be completely untrue. Understanding where Fascism and National Socialism fits on the political spectrum requires a bit deeper digging, all the way back to the Second International, the Zimmerwald Conference and an understanding of what constitutes the revolutionary left and reformist right of socialism. When a Communist refers to a National Socialist as “right wing”, he actually is referring to his position within the socialist framework. It is (and has long been) a vast misunderstanding of socialism to conflate National Socialism and Fascism (both socialist movements) with right wing conservatives, descendants of England’s Burkean Whigs.

It has been necessary to create a new method of understanding political orientation in order to undo the damage that this confusion has caused. One such system was created by Jerry Pournelle, known as The Pournelle Political Axes. Another one is explained by Liberty Papers founder, Eric, in his post A Better Political Spectrum. In either of these logical and well structured approaches to understanding politics we can see that National Socialists and Fascists are clearly not in the same portion of the political spectrum as libertarians and conservatives.

So, with this ground work established, let’s start with a common understanding of what Fascism and National Socialism are and how they relate to free market capitalism. First, some reference material and excerpts from them:

1. Mussolini defines Fascism

The foundation of Fascism is the conception of the State, its character, its duty, and its aim. Fascism conceives of the State as an absolute, in comparison with which all individuals or groups are relative, only to be conceived of in their relation to the State.

2. From Wikipedia’s entry on Fascism

Stanley Payne’s Fascism: Comparison and Definition (1980) uses a lengthy itemized list of characteristics to identify fascism, including the creation of an authoritarian state; a regulated, state-integrated economic sector; fascist symbolism; anti-liberalism; anti-communism; anti-conservatism. He argues that common aim of all fascist movements was elimination of the autonomy or, in same cases, the existence of large-scale capitalism.

3. Ludwig von Mises Socialism argues that Fascism is an inevitable evolution of Socialism. He says in the preface to the second edition:

Neither is there any substantial difference between the intentions of the self-styled ‘progressives’ and those of the Italian Fascists and the German Nazis. The Fascists and the Nazis were no less eager to establish all-round regimentation of all economic activities than those governments and parties which flamboyantly advertise their anti-Fascist tenets.

4. Dr. Lawrence Britt wrote an article which appeared in the Spring 2003 edition of Free Inquiry, page 20, and was called “Fascism Anyone?”. The article is reposted here. In that article he includes 14 defining characteristics of fascism, which I’m going to list here:

  1. Powerful and continuing expressions of nationalism.
  2. Disdain for the importance of human rights.
  3. Identification of enemies/scapegoats as a unifying cause.
  4. The supremacy of the military/avid militarism.
  5. Rampant sexism.
  6. A controlled mass media.
  7. Obsession with national security.
  8. Religion and ruling elite tied together.
  9. Power of corporations protected. [note: this only applies to corporations that support the fascist government]
  10. Power of labor suppressed or eliminated.
  11. Disdain and suppression of intellectuals and the arts.
  12. Obsession with crime and punishment.
  13. Rampant cronyism and corruption.
  14. Fraudulent elections.

While I do not fully agree with Britt, this list of characteristics is going to be interesting when we start digging into the New Deal and FDR as the series progresses. In any case, he is describing characteristics and behaviors of a fascist government rather than the ideals, principles and philosophies they espouse. Reading Hitler and Mussolini is quite enlightening. We quickly discover that they do not believe in the free market, economic freedom or the independence of corporations from government regulation. If we remove their anti-communist rhetoric and listen to how they want to organize society it becomes remarkably clear that they are socialists with a strong nationalist and militarist bent. What is truly interesting is that this is rarely, if ever, made clear in political science courses, the media or any other common forum for discussing politics.

Given this, how does National Socialism and Fascism relate to Capitalism? Capitalism is a method of organizing economic life that calls for the state to not be involved in regulating the economic marketplace (among other things). Fascism does not allow for individual choice independent of the State. Capitalism cannot work if the individual is not free to choose within the marketplace. Fascism and Capitalism cannot co-exist. In fact, Capitalism is only possible within a Liberal society (not liberal in the sense that the political parties in the USA currently use the word, however, where it is roughly equal to progressive or democratic socialism).

In Part II we’ll start tackling the foundations of FDR’s politics and the New Deal.

What Does a Veteran Want Today?

It’s been a long time since I’ve posted. My work has kept me very busy, to say the least. Still, I’ve been here reading and enjoying what my fellow contributors are posting.

But today seemed like a good time to contribute a post of my own. It’s Veteran’s Day (originally Armistice Day). It’s the one and only day set aside to remember the veterans of the wars that America has fought. For most of us this is a weekend of department store sales, war movies on A&E and a 3 day weekend if our employers observe the national holiday tomorrow. But for some of us, it is a day that brings back memories, some as recent as yesterday and some from decades long gone. And this post is for those men and women.

Why do we care about Veteran’s Day? Most of time we end up marching in the parades that celebrate our day, which seems somewhat backwards to us. I’ll try to tell you a bit about who we think we are and what we want. Bear in mind this isn’t some collective that I’m speaking for, just my thoughts, based on my experiences and the hundreds of other veterans I know.

We think that today should be a day that we set aside politics and remember the men and women that have served in the military in wartime. We are men and women who have gone in harm’s way, been at risk of death and injury, and lived in extreme, austere conditions. Most Americans will never understand what it means, in this day and age of an all volunteer military, to serve in the military, let alone in combat. And that’s good.

Today, we want you to set aside your politics. Stop using us as tools in your political battles, just for today.

Sadly, the extremes of the political landscape in our country have gotten worse, not better. On the one side we have a resurgence of soldier = baby killer and soldier = victim rhetoric. On the other, we have soldiers as martyrs to a glorious cause. I’m a former soldier and a veteran of both the Cold War and the first Gulf War, and we are none of those things. We are not victims, brutalized by war and turned into unthinking, callous killers. Nor are we martyrs in the holy war against whomever the current enemy is.

We veterans of America’s wars are men and women who have, for reasons we know, but often cannot clearly convey to anyone else, chosen to serve in the military during time of war. We put our lives on the line, dealt with sacrifices nearly incomprehensible to the average American living today, and managed to do so with honor intact. We are Americans, just like the rest of you. I am neither hero nor villain, nor are my comrades. We are humans, with all the complexities and frailties of any other person.

I don’t think what I did was special or somehow made me a hero, and so it embarrasses me when you say thank you for my military service. But it also touches me deeply when someone goes out of their way to do so. Regardless of what you think of the rightness or wrongness of the conflicts, it is good to know that my personal experiences and service are viewed with value and respect. I have had people from every political landscape in this country talk to me about Veterans on this day over the years without putting their political views on the line as well.

And that is all that we ask.

The Economics of the 2nd Amendment

I don’t think I could say it better, so I’ll just let David’s words stand on their own.

“Suppose one little old lady in ten carries a gun. Suppose that one in ten of those, if attacked by a mugger, succeeds in killing the mugger instead of being killed by him — or shooting herself in the foot. On average, the mugger is much more likely to win the encounter than the little old lady. But — also on average — every hundred muggings produces one dead mugger. At those odds, mugging is an unprofitable business — not many little old ladies carry enough money to justify one chance in a hundred of being killed getting it. The number of muggers declines drastically, not because they have all been killed but because they have, rationally, sought safer professions.”
— David Friedman
Source: Hidden Order: The Economics of Everyday Life (New York: Harper, 1996), p. 299

Let’s Make Something Clear

I realize that the news today will be all about the Virginia Tech shooting. And gun laws. And so forth. But, I think it is valuable, given much of the recent conversation (past 3 months, give or take), to put a stake in the ground on what The Liberty Papers stands for around the war in Iraq, Islamo-Fascism and how to best defend our country.

Let’s start with this statement. We are individuals. We do not require that any contributor adhere to some specific position on anything. The contributors hold a wide range of individual beliefs. From near Anarcho-Capitalist, like Brad and myself, to Minarchists, like Mike and Chris. We also have a fairly divergent range of beliefs on the war in Iraq. Doug is probably the most vocal supporter of ending the war now and Chris the most vocal win the war proponent.

That said, we do have some areas where we all agree.

First, about Iraq. Not one of us would leave our military “in the lurch”, we do not agree with the Democrats approach. Whether we want to withdraw and leave Iraq to deal with its issues on their own, or we want to stay and try to help them through. Every one of us began this saga as supporters of the war in 2003. Most of us still are. I think every one of us would also agree that the Bush Administration has done a bad job of prosecuting this war, both militarily and politically.

Islamo-Fascism. A threat to freedom and liberty, the anti-thesis of everything we believe in. We diverge in how best to deal with the problem. Personally, I say we get rid of our dependence on oil as quickly as possible and leave ‘em to rot in the sand.

How best to defend ourselves against enemies that use terrorism as a tactic. Here we are in strong agreement that giving up liberty to gain false security is the worst possible choice. We all agree that government never gives back power once gained. Government never uses that power for just the narrow purpose defined. And, even if we did think some loss of liberty was necessary, Bush has not shown that he is a wise custodian of such power.

We have clashed with people that some classify as “left libertarians” quite often. Libertarian Party types generally consider us to not be Libertarians. And we agree. Why? Because we disagree with the non initiation of force principle, we disagree, generally, with the isolationist position they take. For the first time that I can recall, we are actually accused of being Libertarians in the Lew Rockwell tradition. We, in fact, are not.

Defining “Wealthy”

Not long ago I read Richard Kiyosaki’s Rich Dad, Poor Dad. Aside from all of the other valuable things in the book, possibly the most valuable thing I got from it is an appropriate definition of “wealthy”. I’ll put it in my own words.

Being wealthy is defined as owning enough income generating assets to support your standard of living without having to work as someone else’s employee.

That is, wealthy has nothing to do with how much money you are paid by an employer. In fact, regardless of how much money you make, I would argue that if your sole source of income is your paycheck, then you are not wealthy, you are “merely” middle class.

Wealth is much more than how much your paycheck is. Money is not wealth. Money is an intellectual representation of the value of work and property. If your money is generated by work, then it is not sustainable independent of an employer. If your money is generated by property, it is. If you look up the definition of the word “wealthy”, you don’t find, until you work your way through a bunch of other definitions, one that speaks to how much money you have. And none that I could find say anything about how much money you are paid, but all speak to what you own or have.

So, why does the Left spend so much time characterizing those who earn high incomes as “rich” or “wealthy”? Well, I suspect that it has much to do with two things.

  1. Truly wealthy people have spent a lot of time and effort on reducing their real income to avoid income taxes
  2. The Left likes to redistribute wealth and item 1 has left them with folks who earn wages as a focus for their redistribution schemes.

So, the point of all this? Change your definition of wealthy and then re-evaluate every time you hear someone on the left talk about the evil rich or wealthy. They are really talking, generally, about someone with a high wage, not someone who is actually wealthy.

Second point. I highly recommend aspiring to being wealthy rather than highly paid.

Quote To Ponder

“Psychologically, it is important to understand that the simple fact of being interviewed and investigated has a coercive influence. As soon as a man is under cross-examination, he may become paralyzed by the procedure and find himself confessing to deeds he never did. In a country where the urge to investigate spreads, suspicion and insecurity grow.”
— Joost A. Merloo
Source: The Rape of the Mind, 1956

Do I really need to add any commentary to this? It seems obvious and self-evident. Worse yet, it is a daily feature of government in this country.

Quotes To Ponder

Freedom is not merely the opportunity to do as one pleases; neither is it merely the opportunity to choose between set alternatives. Freedom is, first of all, the chance to formulate the available choices, to argue over them — and then, the opportunity to choose.

— C. Wright Mills

When liberty is taken away by force it can be restored by force. When it is relinquished voluntarily by default it can never be recovered.

— Dorothy Thompson

Quote of the Day

It’s been a while since any of us posted a “quote of the day”, so it seemed to be time. And this one is so true, except that it seems more like 8 decades, not 3.

Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good.

— Thomas Sowell

We could probably name 10 things without even trying. Maybe the commenters would care to start the list.

How To Not Explain Things To Libertarians

Chris Clarke, at Pandagon, has written a long article about How To Explain Things To Libertarians. As you might expect, as he leads into all of this, he gets some things wrong. The things he gets wrong are the traditional propaganda of the left related to why we need social democracy. For example:

If those don’t work, sometimes these people [ed: Libertarians] are persuaded when it’s pointed out to them that back in the late 19th century, the US essentially was the Libertarian state they now advocate, and a very few people got very wealthy while the rest of us died of food poisoning or coal mine collapses or shirtwaist factory fires.

Well, now, there is some truth to the fact that the owners of industrial corporations were getting very wealthy in that time period. There is also some truth to the fact that people were more likely to die of things like his examples than they are now. There are some inconvenient facts left out, though. Like:

  1. The US in the late 19th century was not functioning the way a classic liberal would want it to. It was not a capitalist society. Rather, it was corporatist, the government provided all sorts of benefits to corporations and the wealthy, taxed imports fairly heavily and even made the guns of the government available to the corporate owners to coerce their workers. This is hardly the stuff of classic liberal (or libertarian) philosophy, where we advocate an even playing field; i.e. equality of opportunity.
  2. Another inconvenient fact. Although, by our standards today, the average worker’s life was pretty bad, it was much better than when they had been a subsistence farmer in South Dakota. There is a reason why people left the farm, went to the city and got a job in a factory. They made more money, had more leisure time and lived longer. And they knew it. Does that mean all was sweetness and light? No, but it was better than being a farmer, which was their alternative. And it generated wealth that allowed more people to buy things, increasing the demand for industrial output, increasing the demand for workers, etc. This cycle was wealth creating, farming never could be.
  3. Those factory workers his heart bleeds for were wealthier than the previous generation. Chris is raising the typical cry of socialists in favor of equality of outcome. I haven’t the time to show why that is unworkable except with totalitarianism, but Hayek did. So, I suggest reading Hayek’s “The Road to Serfdom” to understand why equality of outcome leads to totalitarianism.

» Read more

Education and Liberty

In a recent thread on schools and gifted children, one of our frequent commenters said a couple of things that I think bear further discussion. First, she said:

I do believe there are successful public schools.

Well, I do too. I happen to be, from an education perspective, a product of public schools. My first two years of school were in a private school, actually, and everything else was public education. Including university for that matter (California State University). But, I sincerely believe, based on my current experience with the public education system in two different states, that the typical public education today is mediocre, at best. Then again, I don’t define success as attendance, standardized test scores and a diploma.

A significant portion of the problem here is what we define as a successful school. I consider a school to be successful that teaches students to learn and think critically. That, of course, is not in the mission statements of most schools today. In fact, I find the opposite today. I find that schools teach students to accept what authority tells them and that it teaches them to pass standardized tests rather than think critically about the material presented. Most schools view their mission as preparing children to become part of the workforce, I think an education is about being a successful citizen.

By any measure I can find, our current education system is failing, even its own defined criteria.

The fact that a few schools succeed proves the rule when we call them out as examples of what all schools could be.

The next thing our commenter said was:

I also believe that if we must continue to have government that works and a successful country, we need public schools. I think they are essential to democracy.

While there is a certain strength to this statement, it isn’t quite right in my opinion. I would say that in order to have a successful, liberal society we need schools that work. They are essential to the preservation of liberty.

Now, it seems obvious to me, that education and liberty go hand in hand. Democracy is a means, just as education is, to a desired end. That desired end, which I believe is a common goal of the great majority of the commenters and contributors on this site, is a liberal society, one that values the individual and individual rights above the collective whole. It is possible, although reasonably unlikely, to have liberty without democracy. It is quite possible to have democracy with no liberty, as we see daily around the world.

It is entirely improbably that you could have a liberal society without education. Given that, a liberal society should provide a mechanism where all citizens receive an education to a certain level. However, it seems to me, that a truly liberal society would provide publicly funded education as a safety net for those citizens that cannot provide an education themselves. A mandatory education monopoly, such as we currently have, is not a product of a liberal society. In fact, it has, in the past, been used for distinctly illiberal ends, and continues to be today.

While vouchers may not produce a perfect system, I tend to believe that competition will always work better than a given government monopoly. The sad thing about Utah’s approach is that it will isolate the public schools from market competition. There will be no incentive to improve their offering, leading to a unique situation where the public schools will actually do better financially when a student leaves the school for a private one than when the student stays. Still, many students will benefit from leaving the failed public school system.

The bottom line is two-fold. Education is essential to the preservation of liberty. Our current approach to education is a failure.

The Quest for Security of Privilege

I’m rereading F.A Hayek’s “The Road To Serfdom“. In Chapter 9, where I currently find myself, Hayek is discussing security and freedom. This seems timely, considering the conversation occuring on Doug’s post The Right Direction on Health Insurance Reform.

In this chapter of Hayek’s classic work, he discusses the quest for security and how it impacts the freedom of the individual. Beyond that, he shows that as we increase security for one segment of the population, the insecurity of the other segments necessarily increases. This applies whether we are discussing securing certain levels of income, specific jobs, or social benefits like healthcare. The basis of this is very simple. As one group has their jobs, for example, secured by society, then other groups are left to compete in a smaller market for jobs. Further, those people are going to be more significantly impacted during economic cycles than they would be if a larger pool of jobs and employees were in the free market. The more security you provide, the larger the group that has that security, the more insecure will the unprivileged groups become.

You can read the chapter yourself (here’s an online version of the book) if you like. The bottom line is that the only way to avoid this problem AND provide security of position or income or privilege is to provide perfect security to everyone. To do this requires taking away all liberty. I leave it to the reader to follow the logic on this. So, your option, if you wish to provide security, is to remove liberty.

Hayek has this very insightful thing to say about the quest for economic security (as well, it applies to security of position and privilege) on page 143 (of the 50th anniversary edition):

Thus, the more we try to provide full security by interfering with the market system, the greater the insecurity becomes; and what is worse, the greater becomes the contrast between the security of those to whom it is granted as a privilege and the ever increasing insecurity of the underprivileged.

This is precisely what has happened with healthcare in this country. As I pointed out in my post Specific Healthcare Changes, our supposedly free market healthcare system is massively regulated and subsidized. The effect of the tax subsidies, regulations requiring specific health insurance minimum standards, healthcare welfare and so forth is to create security and privilege for a subset of the population. This has, necessarily, increased the insecurity of those that do not have that security through the action of the government. If you wish to provide the most security to the most people, you have to stop providing privileged security to a subset of the whole. Or become a serf.

When the government controls all of your decisions about, and ability to get, healthcare, you have lost your freedom. You may retain the illusion of freedom by being allowed to vote in elections, or choose which doctor you will see, but you have no true freedom. Are you truly willing to sell your freedom for the illusion of security? Because even that security is an illusion. It is only secure so long as someone other than you decides it should be.

Uncle Milt Speaks To Us One Last Time

The Wall Street Journal conducted an email interview with Milton Friedman in July, 2006. The interview was never published, presumably because Friedman was ailing, although they don’t actually say why. It’s available on Opinion Journal, no subscription needed: Milton Friedman @ Rest.

I pulled out a few quotes I found interesting. Friedman was a critical thinker well worth listening to, even when he didn’t have all of the answers. He trusted people and the marketplace to come up with the answers, and he proved right so many times that most modern economics now focuses on improving his answers in the area of monetary policy and deregulation.

What is the biggest risk to the world economy: America’s deficits? Energy insecurity? Environment? Terrorism? None of the above?

Friedman: Islamofascism, with terrorism as its weapon.

If we are truly free market advocates, we need to look at how to deal with this issue. Simply wishing it away while playing the isolationist is not going to do the trick.

What are your thoughts on the low U.S. savings rate?

Friedman: The right saving rate is whatever satisfies the tastes and preferences of the public in a free and unbiased capital market. Market can adjust to any rate. This is a very complicated question. Present estimates probably understate actual savings because of treatment of capital gains. In any event, the present situation does not raise any problems for the economy.

Great answer. I highlighted the portion in bold that matters. Big government meddlers, go away.

India — how do you assess its prospects?

Friedman: Fifty years ago, as a consultant to the Indian minister of finance, I wrote a memo in which I said that India had a great potential but was stagnating because of collectivist economic policies. India has finally started to disband those collectivist policies and is reaping its reward. If they can continue dismantling the collectivist policies, their prospects are very bright.

India is yet another example of the gains to be had from liberalizing and adopting free market and personal liberty as the modus operandi.

Any thoughts on a China versus India comparison?

Friedman: Yes. Note the contrast. China has maintained political and human collectivism while gradually freeing the economic market. This has so far been very successful but is heading for a clash, since economic freedom and political collectivism are not compatible. India maintained political democracy while running a collectivist economy. It is now unwinding the latter, which will strengthen freedom of all kinds, so in that respect it is in a better position than China.

Every once in a while I feel compelled to pipe up and say China is not the threat everyone claims it is. The clash between political and economic systems is going to make China ineffectual for years. And it’s coming soon. Either that, or they liberalize politically, become a true powerhouse, but without the collectivist system that is so threatening to Rule of Law in their own countries and others.

Thanks for this last taste of you!

They Never Learn

As much as we have griped lately about the GOP not learning it’s lessons (Doug has been especially effective on this front), the Democrats show no propensity to learn from their victory. They did not win because the hard core left of the Democratic Party carried them to party. They won because the small government Republicans were sick of “Compassionate Conservativism” and the centrists were sick of the war. Now, we have Hillary and Barack Obama, John Kerry and John Edwards vying for the Democratic nomination. Yet, none of them will appeal to small government Republicans or centrists.

You doubt me? David Boaz at Cato reminds us of Hillary’s record:

For more than 15 years now, Hillary has been the incarnation of Big Government. She votes with taxpayers only 9 percent of the time, according to the National Taxpayers Union. She calls herself a “government junkie.” She says, “There is no such thing as other people’s children” and calls for ”a consensus of values and a common vision” for 300 million people. She was best known in her White House years for heading a team of 500 bureaucrats organized into 15 committees and 34 working groups to recreate in 100 days one-seventh of the American economy. After health care, she told the New York Times, her next project would be “redefining who we are as human beings in the post-modern age.” Or, as the Times put it, “She wants to make things right.”

She just might be the scariest collectivist this side of Al Gore.

Except that Kerry, Edwards and Obama all have records as bad, or worse. As Boaz points out.

The best hope we have is for Ron Paul, as a spoiler, to shift the debate. And he may just be able to. Better yet, a surprise upset in the ’08 primaries as all the Republicans who are not “Compassionate Conservatives” realize he is their dream candidate now that Reagan and Goldwater are no longer among the living.

Heaven forbid we see McCain vs. Hillary, because the outcome is bad, period. Either a First Amendment hating big government conservative or a Bill of Rights hating big government progressive gets elected. Think on that for a minute if you hated the last 6 Bush years.

More on Police Culture

In yet another clear sign that the Drug War’s most prominent success has been the corruption of police culture in this country, we have this story in Milwaukee.

The Milwaukee Police Department is accused of taking possession of a Mercedes-Benz convertible from a drug-addicted local businessman in return for agreeing not to prosecute him for cocaine possession.

So, in Milwaukee rich folks can trade an expensive car for having criminal charges dropped? That hardly sounds like Rule of Law to me. Wisconsin law does not provide for forfeiture of vehicles in cases of simple possession. Even if it did, normally forfeiture laws and criminal charges are separate issues and you can’t just forfeit a vehicle, or other property, to get the criminal charges dropped. It turns out that wasn’t all the police decided was appropriate for this guy.

Maistelman [ed: the Beck family’s attorney] also cited the family’s belief that police contributed to Beck’s death by threatening to disclose his drug activity.

“At the time of Jordan’s arrest he was in a custody battle with his wife for his minor children. Subsequent to his arrest Jordan and his family were bombarded with threats by your office and or the Milwaukee Police Department that unless he gave his car up, then the authorities would contact his wife’s attorney and ‘rat him out’ about his drug offense.”

Maistelman also wrote that a member of Beck’s family had witnessed “harassing, intimidating and coercive telephone calls” and that authorities also threatened that if he didn’t give up the car, “they would tell certain drug dealers that Jordan and his family were informants, when in fact they were not.”

Remember, as you are reading this, that Mr. Beck was a drug user, not a dealer. He was facing charges for possession, not dealing. He was not a criminal, he was a drug addict. But, he had something the police coveted. An expensive car, worth $100,000, give or take.

We have taught our police departments that taking property if someone is a drug user is okay. They are simply doing something that we have condoned. We have given them power, and they have abused it, as was predictable.

h/t: Radley Balko

What Would It Take?

Jerry Taylor, of CATO, has a great question for those who continue to support the horribly failed War on Drugs:

While it should be obvious to any fair-minded observer that our increasingly brutal war on drugs is a losing proposition on all counts, few of us seem to be fair minded observers. So allow me to pose a question to those of you still clinging to this benighted enterprise: Exactly what would it take to convince you that the drug war was causing more harm than good?

Inquiring minds would like to know. I’m sure that at least a couple of folks who read The Liberty Papers believe in the War on Drugs. So, what would convince you that it was a bad thing and needed to end?

Specific Healthcare Changes

A recent post on healthcare inspired a long thread of comments. In that thread I was critical not only of changes that many people advocate to our system, but of our current system itself. Our current system is a disguised socialism. Sure, the government does not directly run the system, unlike the single payer model in the UK or national model in Canada. However, between the arbitrary regulation (that is, it is not general purpose laws that all citizens can operate within predictably), price fixing and government funding, the system is de facto socialized. The key feature of a socialist system is central planning by government agents, and we have that in spades in our healthcare system.

One of the commenters on the post asked me what I favor as a solution. My response was that we should deregulate and allow the free market to dictate. One of the primary complaints about socialized medical systems is rationing by bureaucrats. Rationing is a way of saying that scarce resources are being allocated, but the resource consumer doesn’t get to choose how they are allocated. All economic systems have rationing. One of the key differences between a centrally planned system and a free market is who makes the rationing choice. In a free market the consumer makes the choice, based on need and price. In a centrally planned system, someone that the consumer never meets makes the choice, based on what they perceive to be the need of the consumer.

Here are some very specific things that could be undone to deregulate healthcare.

  1. Remove the Veteran’s Affairs price fixing (which is misleadingly referred to as negotiating). By law, drug manufacturers have to give VA a price that is 24% below wholesale or they are banned from selling to VA, Medicaid and Medicare. That’s an interesting way to negotiate. Guess what happens? Some drugs don’t get sold to those entities, including the best medications for Parkinson’s and Multiple Sclerosis. Price controls always lead to resource scarcity and increased prices.
  2. Remove the Medicaid price fixing. By law, drug manufacturers must give Medicaid agencies the best price they give anyone else, even if the agency (Rhode Island, for example) doesn’t purchase enough volume of the drug to negotiate that price in a fair market. This, again, has led to an increase in prices and resource scarcity.
  3. Get rid of the HIPAA transaction regulations that everyone has to comply with. This has led to significantly increased cost for everyone in the market except for the insurance companies. If standardized transactions are good, the market will bring them about.
  4. Get rid of Medicaid and Medicare entirely, reduce the federal tax rates by the amount that saves. The states can provide low income health care assistance where needed. Medicare, especially, is horrible. Everyone over 67, regardless of economic status, has to go on Medicare (i.e. single payer).
  5. Stop giving tax and regulatory incentives to employers to provide healthcare benefits. These have led to a system where we buy health benefit plans, rather than health insurance based on risk. Consumers are not purchasers in our current system. They have no incentive not to over consume. We have created a commons and we are suffering the tragedy of the commons.

I’m sure I will hear screams and howls. Think of the children! How can you leave the elderly and poor to fend for themselves! I need to go to the doctor for my runny nose!

We have three major deregulation and/or price control scenarios we can look at: Airlines, telecom systems and gasoline. All three of these were either under significant price controls, had significant regulation or a government created monopoly (or all three, in some cases) in the 1970’s. By removing government regulation and intervention into those industries and allowing market forces to act, we have seen their prices come down and their services and availability go up. We pay less for these goods and services today than we did in 1980 in inflation adjusted dollars, yet have more resource availability and better resources to consume. There is no reason to believe that healthcare is not subject to the same forces and would not benefit as well. If nothing else, we would avoid the arbitrary regulation and central planner rationing that we are seeing today, and which can only get worse on the path we are on.

Update: As Kevin rightly points out in the comments, I missed a big piece of the regulatory environment. So, at Kevin’s suggestion, I’m adding:

6. Abolish all state and Federal laws mandating what medical conditions insurance companies must cover.

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